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Thursday, August 29, 2013

Manulife to buy out 26% stake in ING Life

Canada-based
Manulife Financial Services is in final round of discussion with battery
behemoth Exide Industries to buy 26 percent stake in ING Life Insurance
Company, sources close to the development said. Since the Dutch partner ING
Financial group exited the insurance joint venture ING Life Insurance, Exide
has been in search for a foreign partner. However, CEO of Manulife Financial
Services, Sri Mukul Gupta has refused to comment when asked.

If the
deal is finalized, it will be the first major investment by an insurance company in India since April, when Sumitomo tied up with Delhi-based Max India.
Manulife Financial Services can buy 26 percent stake, the maximum permissible
under the current law. Although, the deal value couldn’t be ascertained but ING
Life Insurance was valued at about Rs 1,100 crore when ING exited. Exide had
purchased 50% stake from three investors including ING, retired investment
banker Hemendra Kothari and the Enam group taking the entire control over the
company.

The
Insurance (Amendment) Bill which permits to raise Foreign Direct Investment
(FDI) to 49 percent, is yet to be tabled in the parliament though the
government gave some indications that it may be passed by the end of the monsoon
session.

Seeing a slowdown in Indian insurance sector due to
the general economic slowdown and the after effects of a sudden restriction on
unfair practices by the Insurance Regulatory and Development Authority (IRDA),
New York Life and ING have exited Indian operations while British banking giant
HSBC is in talks to follow suit. Foreign investors are waiting for the raise in
the FDI ceiling in insurance before putting more money.